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Based on the following information determine the covariance and correlation between the returns of the two stocks. State of Economy Probability of State of Economy
Based on the following information determine the covariance and correlation between the returns of the two stocks.
| State of Economy | Probability of State of Economy | Return of X | Return of Y |
| Bear | 0.10 | -0.02 | 0.034 |
| Normal | 0.65 | 0.138 | 0.062 |
| Bull | 0.25 | 0.218 | 0.092 |
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Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert J. Hughes
7th Edition
0072866578, 9780072866575
